Japan GDP up for 5 straight quarters for the first time in 11 years

US Session Highlights


- (US) Rep Al Green (D-TX) says he will call on Congress to start impeachment proceedings against Pres Trump

- (US) House GOP caucus meeting today said to not focus on Pres Trump's issues; no indication of breaking point with Pres Trump - AP

- (US) House Speaker Ryan (R-WI): want facts before rushing to judgment on Trump-Comey reports; there are clearly a lot of politics being played

- Stocks lost their foothold as investors began to doubt the capability of the Trump administration to enact its economic agenda. Last night's news that memos indicate President Trump asked the FBI to drop the Flynn investigation created an overall lack of confidence in the markets. Blue chips and the broader S&P dropped close to 2%, for the largest one-day drop since Mar 21st. Volume at 3:30pm for the S&P was 17% above 3-month average, with decliners leading advancers 3 to 1. The worst hit sectors in the S&P were Financials and Techs, down 3.1% and 2.6% respectively. The VIX was up 34%, hitting its highest intraday level since April 21st.


US markets on close: Dow -1.8%, S&P500 -1.8%, Nasdaq -2.6%

- Best Sector in S&P500: Financials

- Worst Sector in S&P500: Real Estate

- Biggest gainers: CL +5.7%; EXR +4.9%; BF.B +3.6%

- Biggest losers: MU -7.0%; CFG -6.8%; NVDA -6.6%

- At the close: VIX 15.6 (+4.9pts); Treasuries: 2-yr 1.26% (-2bps), 10-yr 2.22% (-11bps), 30-yr 2.90% (-9bps)


US movers afterhours

- LYC: GMI-1271 receives FDA Breakthrough Therapy Designation for Adult Relapsed/Refractory Acute Myeloid Leukemia; +37.1% afterhours

- LB: Reports Q1 $0.33 v $0.29e, R$2.44B v $2.46Be; Guides Q2 $0.40-0.45 v $0.45e; Raises FY17 $3.10-3.40 v $3.19e; +6.8% afterhours

- CSCO: Reports Q3 $0.60 v $0.58e, R$11.9B v $11.9Be- Guides Q4 $0.60-0.62 v $0.63e, Rev -6% to -4% y/y v -1%e, gross margin 63-64% ; -7.7% afterhours

- GMED: Receives FDA letter saying company had not sufficiently addressed the FDA’s questions regarding the 510(k) submission for the Excelsius GPS robotic guidance and navigation system - filing; -10.5% afterhours

- ASNA: Guides Q3 EPS $0.04-0.06 v $0.11e, SSS -8% y/y; -33.0% afterhours


Key economic data

- (CN) CHINA APR PROPERTY PRICES M/M: RISE IN 58 OUT OF 70 CITIES VS 62 PRIOR; Y/Y: RISE IN 69 OUT OF 70 CITIES V 68 PRIOR; avg all-70 new home prices m/m: 0.7% v 0.6% prior; y/y: 10.7% v 11.3% prior

- (JP) JAPAN Q1 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; ANNUALIZED GDP: 2.2% V 1.7%E; 5th consecutive quarter of growth for the first time in 11 years


- (AU) AUSTRALIA APR EMPLOYMENT CHANGE: +37.4K (2nd straight increase; best 2-month rise since late 2015) V +5.0KE; UNEMPLOYMENT RATE: 5.7% (3-month low) V 5.9%E


- (NZ) NEW ZEALAND MAY ANZ CONSUMER CONFIDENCE INDEX: 123.9 V 121.7 PRIOR; M/M: +1.8% V -2.8% PRIOR; First increase in 4 months


Asia Session Notable Observations, Speakers and Press

- Asian equity indices are down across the board, tracking the biggest US market decline of the year. White House political risk has risen from a simmer to an open flame over the past 24 in the wake of alleged interference by Pres Trump into the FBI investigation of former NSA Flynn. The presidential crisis has sunk so deep that the appointment of a special counsel Mueller to head the Russia probe on Wednesday evening is treated as a positive development, helping US equity futures regain some ground.

- In FX, USD index has now erased all of its post-election gains, while the 10-2 Treasury spread was below 1% for the first time since Trump was elected last year. Predictably, Financials sector was the worst performer on THE S&P500 as long-end Treasuries rose on safe-haven demand. Nikkei225 is among the biggest decliners in Asia as USD/JPY fell as low as 110.50. USD selling is also sufficiently pronounced to boost commodity currencies despite the risk-off mode - AUD/USD was supported into the US market close and then rallied some 30pips on strong Australia employment data. MXN fell for the 2nd straight day however, with USD/MXN rising above 19 level.

- In economic data, Aussie employment change was much higher than expected and unemployment rate fell back to 5.7% for a 3-month low despite participation rate remaining unchanged. Japan Q1 GDP was also constructive with a beat on q/q annalized. Sequentially, Japan grew for the 5th straight quarter - the longest such streak since 2006. Capex was the standout component, rising 0.2% against expected 0.4% decline. Also of note, China house price growth continued to retreat in the wake of property curb measures by regulators - Y/Y growth across top 70 cities slowed to 10.7% from 11.3%.


- (CN) Templeton's Mobius: No doubt there's risk in China, but govt will insulate SOEs - press

- (CN) China said to be considering excluding some industries from carbon permit trade

- (CN) China Banking Regulator (CBRC) to increase protections after recently global cyber attack - local press

- (CN) Fitch: Rapid growth in China investment companies is building risks - press


- (JP) BOJ Dep Gov Iwata: No details of policy exit have been decided - press

- (JP) Credit Suisse: Pace of Japan GDP growth may slow - press


Asian Equity Indices/Futures (00:30ET)

- Nikkei -1.6%, Hang Seng -0.2%, Shanghai Composite -0.2%, ASX200 -1.2%, Kospi -0.5%

- Equity Futures: S&P500 +0.2%; Nasdaq +0.3%, Dax +0.3%, FTSE100 +0.3%


FX ranges/Commodities/Fixed Income (00:30ET)

- EUR 1.1145-1.1175; JPY 110.50-111.20; AUD 0.7410-0.7465; NZD 0.6925-0.6950

- June Gold +0.1% at 1,260/oz; June Crude Oil -0.3% at $48.92/brl; July Copper -0.8% at $2.52/lb

- (CN) PBOC to inject combined CNY80B v CNY140B prior in 7-day and 14-day reverse repos

- (CN) PBOC SETS YUAN MID POINT AT 6.8612 V 6.8635 PRIOR; Strongest Yuan setting since Feb 7th; 6th consecutive firmer fix

- (JP) Japan's MoF sells ¥0.9T in 0.7% (0.7% prior) 20-year JGBs; Avg yield: 0.560% v 0.562% prior; bid-to-cover: 3.84x v 4.06x prior


Asia equities notable movers


- Sirtex (SRX) -28.6%; Announces combined Foxfire analysis; primary endpoint of overall survival superiority not met in mCRC

- Virgin Australia (VAH) -2.8%; Reports Q3

- Fairfax (FXJ) +6.6%; Receives takeover offer from Hellman&Friedman consortium at $1.225-1.250/shr cash

- James Hardie (JHX) -5.6%; Reports FY16/17


- Sumitomo Mitsui (8316) -3.0%; Guides FY20

- Nintendo (7974) -0.4%; Switch sales

- Senko Group (9069) -1.3%; Cut at Nomura

Hong Kong

- Tencent (700_ +3.9%; Q1 result

- Parkson Retail Group (3368) +1.0%; Q1 result

- TPV Technology Ltd (903) -7.7%; Q1 result

- Johnson Electric Holdings (179) +8.1%; Q1 result

All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.